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100
___ - the structure of methods and principles that a society uses to produce and distribute goods and services
economic system
100
___ - any arrangement that allows buyers and sellers to exchange goods and services
market
100
___ - the concentration of the productive efforts of individuals and businesses on a limited number of activities
specialization
100
___ - the first modern economist, whose book The Wealth of Nations describes how free markets function and self-regulate
Adam Smith
100
___ - an economic system in which decisions on the three key economic questions are based on voluntary exchange in markets
free market economy
200
___ - the power of consumers to decide what gets produced
consumer sovereignty
200
According to the circular flow model of a market economy, firms buy factors of production from households, then
use these factors to produce goods and services.
200
___ - an economic system that relies on habit, custom, or ritual to decide the three basic economic questions
traditional economy
200
___ - level of economic prosperity
standard of living
200
The distribution of income received in the form of rent, wages, or interest is the main factor that determines
who consumes goods and services.
300
___ - another name for a centrally planned economy
command economy
300
Which basic economic goal is most easily achieved in a traditional economy?
equity
300
___ - the income people receive in return for supplying factors of production
factor payments
300
___ - the process of bringing new methods, products, or ideas into use
innovation
300
___ - a period of change in which a nation moves from one economic system to another
economic transition
400
Who makes most basic decisions in a centrally planned economy?
government
400
___ - a political system in which the government owns and controls all resources and means of production and makes all economic decisions
communism
400
What distinguishes an authoritarian government from a democratic one?
It requires strict obedience from its citizens.
400
Private property ownership and some government regulation of the economy are basic characteristics of which economic system?
mixed economy
400
___ - the process of selling businesses or services operated by the government to individual investors, and then allowing them to compete in the marketplace
privatization
500
Key advantages of free market economic systems include
economic efficiency, economic freedom, economic growth, and variety of goods.
500
What are the three basic economic questions all societies must answer?
What goods and services should be produced, how should they be produced, and who will consume them?
500
___ - creations, such as books, songs, or symbols, that consist of ideas rather than physical objects
intellectual property
500
___ - the doctrine that government generally should not intervene in the marketplace
laissez faire
500
What did Karl Marx believe about capitalism?
that it led to exploitation of workers